Questions for Hospital and Provider Groups

Massachusetts Division of Insurance Small Group Health Insurance Informational Hearings

The Division of Insurance (DOI) held 7 weeks of hearings in November/December 2009 with Massachusetts Health Maintenance Organizations and insurance companies ("health plan hearings") to explore the factors leading to increases in the cost of health insurance, with an emphasis on small group health insurance. During the health plan hearings, the DOI asked many questions about claims administration, provider networks, and provider rate negotiation processes. In order to better understand these processes, the DOI has invited hospital organizations and health care providers to attend sessions with the DOI. The DOI is distributing the following questions so that invitees may prepare for the sessions.

Questions for Hospital and Provider Groups

Identify, over the past five years, the number of staff, amount of time, and total administrative expenses devoted to claims administration and billing, including, but not limited to, authorizations and problem claims. Explain the proportion of your claims that are submitted electronically. Explain what you believe continue to be problems with the process to pay claims and ideas you have about ways to improve the system.

Identify, over the past five years, the number of staff, amount of time, and total administrative expenses devoted to contract and rate negotiation. What proportion of your contracts with health plans is up for renegotiation in any one year? Do you stagger contracts so that they renew at different times?

Describe the contracting and rate negotiation process for the following markets and how they may differ among any of the noted markets:

Health Carriers ("health plans") for Medicare/Medicaid accounts;

Health Carriers for commercial accounts; and

Third-Party Administrators.

What is your timetable to initiate the negotiation process, obtain initial quotes from a health plan, secure commitments from a health plan, and agree to reimbursement rates? Identify the information that you use to evaluate what you believe to be a fair and appropriate rate of reimbursement.

What are the most frequent reasons that you may consider terminating a contract with a health plan and/or cease to be a provider in a health plan's network?

Do you adopt a health plan's boilerplate provider contracts? If not, identify the reasons you may require customized contract language.

Identify the proportion of contracts in which you receive reimbursement primarily on (1) a fee-for-service or discounted fee for service basis, (2) DRG basis or (3) global payment or other basis (where other, please identify the method of reimbursement).

If you do not have "global payment" arrangements with health plans, identify the reasons that you have not agreed to accept "global payments" for covered services.

Identify (1) all types of pay-for-performance or quality-based reimbursement that you receive, and (2) the range of different pay-for-performance incentives received during the 2008 calendar year.

Highlight what you have done over the past five years to change your contracting activities and explain for each of these changes how it has improved service and/or reduced your contracting expenses.

Identify the actual and projected costs that your company uses as the basis for its requested reimbursement and the way that you use this information in negotiations. Identify any similar information you request of the health plan. Provide any information you have regarding the underlying costs of your system. In particular, please provide a breakdown of actual costs and trends in those costs over the past five years, related to the following: new technology; medical malpractice insurance; health information technology; executive, physician and staff compensation; facilities; and clinical services. Explain the factors that are leading to your organization's cost increases, including details on the factors leading to increasing in salaries, physical plant, new technology, information systems or other elements of your organization.

Identify whether you will only contract with a health plan if the contract is for all the services provided in your facility or through your delivery system (an "all or nothing" approach).

Identify how your organization has changed in the past ten years, including a discussion of any major expansions, mergers and/or acquisitions you have completed in the last 10 years.

Explain whether you have acquired or opened any satellite facilities. If so, does the satellite facility have the same tax ID number? Is the satellite facility paid the same rates or reimbursement as the main facility?

Identify any strategies that you would propose to control health care costs.

Identify any strategies that you would propose to control rising health insurance premiums.